7/31/2019 Specimen Engagement Letter

1/2

Specimen engagement letter (for information

purposes)To the Board of Directors or the appropriate representative of seniormanagement:You have requested that we audit the financial statements of., whichcomprise the balance sheet as at, and the income statement, statement ofchanges in equity and cash flow statement for the year then ended, and asummary of significant accounting policies and other explanatory notes. Weare pleased to confirm our acceptance and our understanding of thisengagement by means of this letter. Our audit will be conducted with theobjective of our expressing an opinion on the financial statements. We willconduct our audit in accordance with International Standards on Auditing.ThoseStandards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance whether the financialstatements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor'sjudgement, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. An audit also includesevaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well asevaluating the overall presentation of the financial statements.

Because of the test nature and other inherent limitations of an audit, together

with the inherent limitations of any accounting and internal control system,there is an unavoidable risk that even some material misstatements mayremain undiscovered.In making our risk assessments, we consider internal control relevant to theentity's preparation of the financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purposeof expressing an opinion on the effectiveness of the entity's internal control.However, we expect to provide you with a separate letter concerning anymaterial weaknesses in the design or implementation of internal control overfinancial reporting that come to our attention during the audit of the financialstatements.

We remind you that the responsibility for the preparation of financialstatements that present fairly the financial position, financial performance andcash flows of the company in accordance with International financial ReportingStandards is that of the management of the company. Our auditors' report willexplain the management is responsible for the preparation and the fairpresentation of the financial statements in accordance with the applicablefinancial reporting framework and this responsibility includes:

7/31/2019 Specimen Engagement Letter

2/2

Designing, implementing and maintaining internal control relevant to thepreparation of financial statements that are free from misstatement, whetherdue to fraud or error Selecting and applying appropriate accounting policies; and Making accounting estimates that are appropriate in the circumstances.As part of our audit process, we will request from management writtenconfirmation concerning representations made to us in connection with theaudit.We look forward to full cooperation from your staff and we trust that they willmake available to us whatever records, documentation and other informationare requested in connection with our audit.[Insert additional information here regarding fee arrangements and billings, asappropriate].Please sign and return the attached copy of this letter to indicate that it is inaccordance with your understanding of the arrangements for our audit of thefinancial statements.

XYZ & Co.Acknowledged on behalf ofABC Company by (signed)Name and TitleDate